ADB Group reports a mid-period business updateTuesday, October 25th, 2011
GENEVA — Advanced Digital Broadcast Holdings SA (SIX: ADBN) gave today an update on the development of its business.
The Group’s business developed according to the management’s expectations during the third quarter of 2011. The top line growth remains subdued due to changes in the Group business focus, namely scaling down of the terrestrial business, discontinuation of the retail segment and as a result of still persisting overall macroeconomic situation.
The Group reorganization efforts started to bear fruit and the operating profitability, excluding acquisition and reorganization charges, develops favorably. Reorganization expenses are expected to include the anticipated US$ 6-7 million costs plus additional charges of US$ 7-8 million resulting from the write-off of engineering developments and inventories of the discontinued businesses.
The Group confirms its guidance for the full year 2011:
- Revenue expected to grow around 15% year-on-year
- EBIT% (before acquisition and reorganization charges) expected to be positive
The Group notes that EBIT% (before acquisition and reorganization charges) is expected to be 2-3% of revenue and that acquisition and reorganization charges are expected to be US$ 13-15 million, out of which approximately US$ 9 million are 2011 non-cash items. The Group further notes that the pro-forma net profit in 2011 – which excludes the impact of acquisition and reorganization charges – is expected to be positive.
The business developed satisfactorily during the third quarter, achieving full backlog coverage for 2011 and a high visibility for the first half of 2012. Both Broadband and Broadcast Divisions sales were affected by the overall economic situation in Europe, causing the operators to hold back on their capital expenditure during 2011. However, several of the top ten customers have provided improved business visibility for 2012. At the Emerging Business Division, the business started to evolve positively and is expected to continue this during 2012, mostly due to the growing contribution from the US cable customers. The Services Division has been performing ahead of expectations and is projected to continue its growth in 2012 and beyond. Its contribution to the Group’s EBIT, as well as the gradient of its sales growth, are significant, supporting the Group strategy of moving towards complete solutions and services.
Integration of the acquired broadband business is proceeding according to the plan, and the first cross-selling opportunities are now visible. This is expected to bring positive results in the upcoming 2 – 3 years, as communicated at the time of the acquisition. Meanwhile, the Group has been progressing with its reorganization and partially streamlined its operations. The Group targets to complete the reorganization by the end of 2011, but recognizes the fact that this process may continue into the first half of 2012.
During the third quarter, the Group continued showing its technology prowess in various industry trade events and was nominated for and rewarded with industry awards. It is noteworthy to mention that both nominations and actual awards for the Group are now playing increasingly in the field of complete solutions (e.g. Multi-room solution recently awarded at SatKrak in Poland). This confirms the Group view of the market trends, its strengths in technology and the pertinence of its business strategy.
Mr. Jas Saini has been appointed Executive Vice President for Strategy and Technology and a member of the Executive Committee of ADB Group, with immediate effect. Mr. Saini has been with ADB Group since June 2010.
Management of ADB Group will hold a conference call to comment on this press release today at 15:00 CET. Participants shall dial the number +41 (0) 44 580 6398 with pass code “ADB”.
Links: Advanced Digital Broadcast